Health panel pares $2.3B

Medicaid Redesign Team action fills major budget gap, governor says

By CASEY SEILER State editor

Published 12:55 am, Friday, February 25, 2011

Jason Helgerson, Medicaid Director speaks during the Medicaid Redesign Team open meeting at the Empire State Plaza in Albany, New York February 24, 2011. (Skip Dickstein / Times Union)

Jason Helgerson, Medicaid Director speaks during the Medicaid...

Missing from the during the open meeting of thee Medicaid Redesign Team panel today was Dr. Jeffrey Sachs at the Empire State Plaza in Albany, New York February 24, 2011. (Skip Dickstein / Times Union)

Missing from the during the open meeting of thee Medicaid Redesign...

Budget Director Robert Megna speaks during the Medicaid Redesign Team open meeting at the Empire State Plaza in Albany, New York February 24, 2011. (Skip Dickstein / Times Union)

Budget Director Robert Megna speaks during the Medicaid Redesign...

The Medicaid Redesign Team meets during open meeting at the Empire State Plaza in Albany, New York February 24, 2011. (Skip Dickstein / Times Union)

The Medicaid Redesign Team meets during open meeting at the Empire...

The Medicaid Redesign Team meets during open meeting at the Empire State Plaza in Albany, New York February 24, 2011. (Skip Dickstein / Times Union)

The Medicaid Redesign Team meets during open meeting at the Empire...

The Medicaid Redesign Team meets during open meeting at the Empire State Plaza in Albany, New York February 24, 2011. (Skip Dickstein / Times Union)

The Medicaid Redesign Team meets during open meeting at the Empire...

Michael Dowling, Co-Chairman of the Medicaid Redesign Team speaks during the open meeting at the Empire State Plaza in Albany, New York February 24, 2011. (Skip Dickstein / Times Union)

ALBANY -- Beating its deadline by a week, Gov. Andrew Cuomo's Medicaid Redesign Team handed off a package of 79 recommendations designed to save $2.3 billion from the health care program in the 2011-2012 fiscal year.

The vote on Thursday came at the end of six hours of discussion on the proposals, which ranged from elements as monumental as a global spending cap to more granular ideas such as tighter controls on prescription footwear.

The swiftness of the move to a vote -- a second day of discussion had been planned for Friday -- left several members of the panel feeling bruised. Lara Kassel of the advocacy group Medicaid Matters said she was "shocked" by the decision, and chose to abstain.

"More time for the sake of more time is not something that I think is beneficial to any of us," said James Introne, Cuomo's deputy secretary for health, just before the vote.

The meeting began with good news from state Budget Director Robert Megna, who reported that due to slower-than-expected growth in the state's Medicaid caseload, some $375 million of the cost savings from the group's original target of $2.85 billion wouldn't need to be accounted for in their recommendations.

The major elements of the package include a 4 percent cap on the state's share of Medicaid, which would be pegged at slightly more than $15 billion. The gross cost of New York's Medicaid program, including federal funds, would be almost $53 billion.

To enforce the cap, the state Department of Health and the Budget Division would be charged with monitoring month-to-month spending, and would be empowered to impose "utilization controls" and rate reductions if those agencies determined it was about to be exceeded.

The plan would also initiate a rapid expansion of the use of managed care programs: Within three years, almost all Medicaid recipients would be entered into a program in which all major aspects of their care would be centrally monitored. Critics of current Medicaid practices note that one of the main cost drivers is the hodgepodge nature of much of its spending, especially on the state's most vulnerable.

The plan calls for up to 1 million New Yorkers to have access to "patient-centered medical homes," a term for programs that integrate patients and health care providers in a more cohesive way. The Redesign Team pointed to the Adirondack Region Medical Home Pilot, based in Essex County, as a model.

Some $640 million in savings is slated to be achieved by cost-containment within the health care industry -- a big ticket that remains more of a concept than a set of hard policies.

There will also be controls on personal care and home health costs, and reform of medical malpractice with a cap on non-economic damages and a new fund for neurologically impaired infants.

The last element has already proven to be controversial in the consumer advocacy and legal communities, while the powers granted to the Department of Health and the Budget Division by the global cap will be the subject of much discussion in the Senate and Assembly. The fiscally conservative group Unshackle Upstate criticized a recommendation to extend the HCRA surcharge to office-based radiology and surgery services, which it said "will only add to the overwhelming tax burden on insured New Yorkers."

The majority and minority conferences of both houses of the Legislature were included on the Redesign Team, although based on an earlier understanding those present on Thursday abstained from the final vote.

After the approval vote, the members of the Redesign Team handed off a fat binder of their proposals to Cuomo in the ornate Red Room.

The governor said the elements of the package would be inserted into his budget bills before the deadline for the 30-day amendments to the legislation. Any changes to his budget plan after that point would require legislative approval merely to be included.

The varied interests of the health care figures arrayed behind the governor in the Red Room suggested that the decision to bring together leaders who were more naturally opponents seems to have paid off -- so far.

"Our governor has given us an opportunity to work together to fashion proposals that are good for the people, and not to take the issues to the court of public opinion, as we have in the past," said Raske. "I submit that this is a much better way for all concerned."

Cuomo said the conclusion of this aspect of the team's work fills in what his critics said was a nearly $3 billion blank spot in his budget proposal, which he wants to see passed by the start of the new fiscal year on April 1.

"Well, we just filled in the blank, OK?," Cuomo said. "The questions have been answered. Now we need the Legislature to fill in the blank and to do their job, and to get a budget passed on time."

Conspicuous in his absence from the Thursday meeting was Jeffrey Sachs, a Cuomo friend and Redesign Team member whose private consulting work for several New York hospitals has drawn concern from ethics watchdogs. A spokesman said Sachs had a scheduling conflict.

The approval of the package marked the end of the first major assignment for state Medicaid Director Jason Helgerson, who previously engineered a much-praised redesign of Wisconsin's program before answering Cuomo's call to tackle New York's large and complex system.

The team's next task is coming up with long-term changes to state Medicaid spending; the redesign team has been tasked with releasing quarterly reports before disbanding at the end of the 2011-12 fiscal year.

In the Red Room, Helgerson caught himself after referring to one proposal's effect on "children born in Wisconsin."

He caught himself and smiled. "That's the first time I've done that," he said.